---
title: "Finland Employer Cost Breakdown 2026 | TyEL, Payroll"
description: "Finland employer cost 2026: TyEL pension at 17.10%, plus health, unemployment and accident cover. No minimum wage in law."
canonical: https://www.teamed.global/country-hiring-guides/finland/cost-breakdown
---

Finland · Cost breakdown child

Served by Teamed vetted partner-entity network in Finland

# How much does it really cost to *hire in Finland* in 2026?

Finland has no statutory minimum wage and no statutory severance pay. Your single biggest employer cost is the earnings-related pension. Employers pay an average TyEL pension contribution of 17.10% of wages in 2026. Add health insurance at 1.91%, unemployment cover from 0.31%, and accident and group life cover, and the statutory add-on lands near 20 percent of gross before the sector collective agreement adds its own floor.

Last reviewed 13 June 2026 · Finland guide

![Helsinki harbour at dusk with the white Lutheran Cathedral lit against a soft blue evening sky, viewed from across the market square.](/images/country-guides/finland-cost-breakdown.webp)

Illustration · Helsinki, Finland

Answer.cite this

Hiring in Finland costs roughly 20 percent on top of gross salary in statutory employer charges. The earnings-related pension is the big one. Employers pay an average TyEL pension contribution of 17.10% of wages in 2026. The employee pays a further 7.30%.

On top of pension, employers pay health insurance at 1.91% and unemployment insurance from 0.31% of payroll. Accident cover averages 0.70%. Group life cover averages 0.06%. The accident rate varies by job risk.

Finland sets no minimum wage by law. Pay floors come from the sector collective agreement instead. There is no statutory severance pay. Every employee gets 5 weeks of paid annual leave. Income tax is withheld from each pay run, not paid by the employer.

## The headline: what a Finland hire actually costs

Start with gross salary. Add the employer pension contribution of 17.10%. Add health insurance at 1.91%, unemployment from 0.31%, accident cover at 0.70%, and group life at 0.06%.

The table below shows illustrative totals at a 60,000 EUR annual salary. These are computed from verified statutory rates and labelled illustrative. They are not statutory figures.

Finland's employer add-ons are dominated by the earnings-related pension, known as TyEL. The pension contribution alone is larger than every other employer charge combined. The rest are smaller percentage lines on gross pay. There is no payroll cap on the main contributions, so the cost scales with salary.

| Line | Illustrative cost on 60,000 EUR annual salary | Source |
| --- | --- | --- |
| Gross salary | EUR 60,000 | Contract |
| Employer pension (TyEL) at 17.10% | EUR 10,260 (illustrative) | [ETK: Pension contributions (private sector)](https://www.etk.fi/en/finnish-pension-system/financing-and-investments/pension-contributions/private-sector/) |
| Employer health insurance at 1.91% | EUR 1,146 (illustrative) | [Vero: Social insurance contributions](https://www.vero.fi/en/businesses-and-corporations/taxes-and-charges/being-an-employer/social-insurance-contributions/) |
| Employer unemployment insurance at 0.31% on payroll up to the threshold | EUR 186 (illustrative) | [Varma: Social security contributions and limits 2026](https://www.varma.fi/globalassets/tyonantaja/social-security-contributions-and-limits.pdf) |
| Employer accident insurance at 0.70% on average | EUR 420 (illustrative) | [Varma: Social security contributions and limits 2026](https://www.varma.fi/globalassets/tyonantaja/social-security-contributions-and-limits.pdf) |
| Employer group life insurance at 0.06% on average | EUR 36 (illustrative) | [Varma: Social security contributions and limits 2026](https://www.varma.fi/globalassets/tyonantaja/social-security-contributions-and-limits.pdf) |
| Annual leave: 5 weeks per year (paid, employer cost built into salary) | Included in salary | Annual Holidays Act 162/2005 |
| Statutory minimum wage | None (set by sector collective agreement) | No statute |
| Statutory severance | None (no general severance in law) | No statute |
| **Total illustrative employer cost** | **~EUR 72,048 before the Teamed fee** | **~120% of gross (illustrative)** |

These figures are illustrative. They are computed from the verified 2026 rates above, applied to a 60,000 EUR salary. They are not statutory figures. The unemployment line uses the lower employer rate of 0.31%, which applies to payroll up to a high annual threshold; very large payrolls pay 1.23% on the part above it. The accident rate of 0.70% is an average and varies by the risk of the job.

Add Teamed from $599 per employee per month and the total rises by a flat, predictable line. Use the [Employer Cost Calculator](https://www.teamed.global/tools/employer-cost) to run your own salary figures.

1. Start with gross salary Confirm the agreed gross salary in euros. This is the base every employer contribution builds on. None of the main contributions has a low salary cap.
2. Add the pension contribution Apply the employer TyEL pension rate to gross pay. This is the largest single employer cost in Finland and applies to the whole wage.
3. Add the smaller social lines Add health insurance, unemployment, accident and group life cover. The accident rate depends on the risk of the role, so confirm it for the job.
4. Read the collective agreement Find the sector collective agreement that covers the role. It sets the real pay floor and may add a holiday bonus the law does not require.
5. Plan exit costs from day one There is no statutory severance. The main exit cost is the notice period, and an unfair dismissal can cost far more. Build fair process and documentation in from the start.

## The employer social contributions, line by line

Employers pay five social contributions on top of salary. The pension contribution of 17.10% is by far the largest. The other four are small percentage lines on gross pay.

None of these has a low salary cap that stops the cost growing. The bill rises with the salary. The accident rate varies with the risk of the job.

### Earnings-related pension (TyEL)

The pension is the heart of the Finnish employer cost. In 2026 the average employer share is 17.10% of wages. The employee pays a further 7.30%, which the employer withholds from pay. The two together come to an average total of 24.40% of payroll. The employee share is now a single rate for all ages; it used to be split by age band.

ETK Finland · Pension contributions 2026

Employer TyEL pension contribution: **17.10%** of wages on average. Employee share: **7.30%**. Average total: **24.40%** of payroll. The employer pays the larger part. The contribution applies to the full wage, with no low earnings cap.

Source: [ETK: Pension contributions, private sector (2026)](https://www.etk.fi/en/finnish-pension-system/financing-and-investments/pension-contributions/private-sector/)

### Health insurance

The employer health insurance contribution is 1.91% of wages in 2026, up from the 2025 rate. The employee also pays health contributions, deducted from pay: a medical care contribution of 1.10% on wage income, plus a daily allowance contribution of 0.88% once annual salary reaches the threshold. The employee lines are withheld, not an employer cost.

### Unemployment insurance

The employer unemployment contribution is 0.31% on payroll up to a high annual ceiling, then 1.23% on the part above it. Most single hires sit entirely in the lower band. The employee pays 0.89%, withheld from pay.

### Accident and group life cover

Statutory accident insurance averages 0.70% of wages, but the real rate is set by the risk of the role and the insurer's tariff. An office role costs less than a construction role. Group life cover adds 0.06% on average. Both are employer-funded.

## Income tax: what the employer withholds, not what it pays

Finland uses a progressive state income tax with five bands for 2026. The employer withholds it from each pay run. It is the employee's cost, not the employer's.

The bottom band starts at 12.64%. The top state rate reaches 37.50% on income over 52,100 EUR. Municipal tax and a small broadcasting tax apply on top.

Income tax in Finland is withheld at source by the employer, then remitted to the tax authority. It does not add to the employer's wage cost in cash terms. It becomes a cost only when the employer withholds the wrong amount or remits late.

### The 2026 Finland state income tax bands

The 2026 scale lowered the top marginal rate. The five state bands below apply for the 2026 tax year. Municipal income tax is charged on top and varies by municipality. A separate public broadcasting tax of 2.50% applies on income above a floor, capped at a small annual amount.

| Annual taxable income band | State marginal rate |
| --- | --- |
| 0 to 22,000 EUR | 12.64% |
| 22,000 to 32,600 EUR | 19.00% |
| 32,600 to 40,100 EUR | 30.25% |
| 40,100 to 52,100 EUR | 33.25% |
| Over 52,100 EUR | 37.50% |

Source: [Ministry of Finance: 2026 state income tax scale (1140/2025)](https://vm.fi/-/valtion-talousarvioesitys-vuoden-2026-veromuutokset-kootusti)

The top state rate is 37.50% on income over 52,100 EUR. With municipal tax added, the overall top marginal rate sits near 52 percent. This is the employee's tax. The employer's job is to withhold it correctly and remit it on time. Capital income, which most salaried hires will not have through payroll, is taxed at 30.00% up to 30,000 EUR and 34.00% above that.

## Leave and sick pay: what the law requires

Every Finnish employee earns 5 weeks of paid annual leave under the Annual Holidays Act. Leave builds up over the holiday year, then is taken mostly in summer.

Sick pay is employer-funded for a short window. After one month of service, the employer pays full pay through the ninth day after the employee falls ill (9 days). After that, the state allowance takes over.

Finland's leave entitlements sit in the Annual Holidays Act and the Employment Contracts Act. Some are employer-funded directly. Others are paid by the state through Kela.

### Annual leave

The statutory minimum is 5 weeks of paid annual leave. This breaks down as four weeks of summer holiday and one week of winter holiday. Leave accrues at two or two and a half days per month depending on length of service, reaching about 30 working days for longer-tenured staff. Holiday bonus, often called lomaraha, is common but comes from the sector collective agreement, not the law.

### Sick pay

Where employment has lasted at least one month, the employer pays full pay for the period of illness through the end of the ninth day after the day of falling ill (9 days). After that, the state sickness allowance through Kela takes over. Where employment has lasted less than one month, the employer pays 50% of pay for the same window. Budget short-window sick pay as an event cost, not a fixed monthly charge.

### Family leave

The 2022 family leave reform gives a pregnancy allowance of 40 days of working days, then a parental allowance of 160 days per parent, part of which can be transferred to the other parent. These allowances are paid by Kela, not the employer. The employee must give the employer notice of family leave: 2 months in advance. Whether salary tops up the state allowance during leave depends on the collective agreement.

### Working time and Sunday pay

Regular working time is capped at 40 hours per week and 8 hours per day, though many white-collar collective agreements set 37.5 hours. Work on a Sunday, a church holiday, Independence Day or May Day carries a rate increase of 100% on the hourly pay.

## The costs that do not appear on a salary sheet

Three things sit outside the simple percentage-of-salary maths. The collective agreement, the trial-period rules, and the cost of getting a termination wrong.

Each can shift the real cost of a Finland hire well beyond the headline contributions if you plan the contract without them.

### The sector collective agreement sets the real pay floor

Finland has no minimum wage in law. The pay floor, holiday bonus, notice terms and many benefits come from the generally binding sector collective agreement instead. You cannot price a Finnish hire from the statutory percentages alone. You have to read the agreement that covers the role, because it can set a higher pay floor and add a holiday bonus the law does not require. Treat the collective agreement as a cost input, not a footnote.

### The trial period

Employer and employee can agree a trial period of up to 6 months from the start of work. During the trial period either side can end the contract on shorter terms. Outside it, the standard notice and grounds rules apply. The trial period extends by one month for every 30 days the employee is off on sick or family leave, so a long absence pushes the window out.

### Notice pay

There is no general severance pay in Finland. The cost on a lawful employer-led exit is the notice period, paid as worked or as pay in place of notice. Employer notice runs from 14 days for under a year of service up to 6 months for over 12 years. A resigning employee gives 14 days up to five years, then 1 month. Budget notice pay as the main exit cost.

### Unfair termination exposure

An exit without proper grounds is the expensive risk. A court can award compensation for an unjustified termination of between 3 months and 24 months of pay. For elected staff representatives the ceiling is higher. A poorly documented dismissal can cost far more than years of the statutory contributions. Good process from the first day is the cheapest protection.

## How Teamed handles Finland employment costs for you

Teamed becomes your legal [employer of record](/lp/employer-of-record) in Finland for [**from $599 per employee per month**](/pricing), with **zero FX mark-up** in any currency.

Pension, health insurance, unemployment cover, income tax withholding and the full Finland compliance stack run on **one platform**.

**Real HR and legal experts** handle your Finland hires from the first offer letter through every pension remittance and tax filing. **An actual person**, not a chatbot or a pooled queue. There is **no setup fee** and **no exit fee**. Every employer cost **passes through at cost, itemised** on every invoice. You see the TyEL pension line, the health insurance line, and any leave liability. Nothing sits hidden inside the management fee.

EOR payroll, contractor onboarding, and entity setup all live on **one platform**. A Finland contractor who converts to employment keeps their record. That same employee can **graduate** from EOR to your own Finnish entity without switching systems. EOR is the right structure for a first Finland hire, **until it isn't**. Teamed reads the sector collective agreement so your contract meets the real pay floor, not just the statutory minimum, because Finland has none. Start from [the Finland hiring overview](/country-hiring-guides/finland) or run the [Employer Cost Calculator](https://www.teamed.global/tools/employer-cost) to see the full picture.

## Frequently asked questions

What does it cost to hire an employee in Finland in 2026?

Statutory employer add-ons run near 20 percent of gross salary. The largest line is the earnings-related pension, where the employer pays an average of 17.10% of wages. On top of that come health insurance at 1.91%, unemployment insurance from 0.31%, accident cover averaging 0.70%, and group life cover at 0.06%. There is no statutory minimum wage; the pay floor comes from the sector collective agreement. Add Teamed from $599 per employee per month for the full employer-of-record service.

How much is the employer pension contribution in Finland?

The average employer earnings-related pension contribution, known as TyEL, is 17.10% of wages in 2026. The employee pays a further 7.30%, which the employer withholds from pay. The two together come to an average total of 24.40% of payroll. The pension applies to the full wage, with no low earnings cap, so the cost rises with salary.

Does Finland have a statutory minimum wage?

No. Finland has no statutory minimum wage. Minimum pay is set by the generally binding collective agreement for each sector instead. This means you cannot price a Finnish hire from the statutory contributions alone. You have to read the collective agreement that covers the role, because it sets the real pay floor and often a holiday bonus the law does not require.

What annual leave is a Finland employee entitled to?

Every employee earns 5 weeks of paid annual leave under the Annual Holidays Act, made up of four weeks of summer holiday and one week of winter holiday. Leave accrues at two or two and a half days per month depending on length of service. A holiday bonus, often called lomaraha, is common in Finland but comes from the sector collective agreement, not the law.

Is there statutory severance pay in Finland?

No. Finland has no general statutory severance pay. On a lawful employer-led exit the main cost is the notice period, which runs from 14 days for under a year of service up to 6 months for over 12 years. If a termination lacks proper grounds, a court can award compensation for unjustified termination of between 3 months and 24 months of pay, so good process matters more than any severance formula.

How does employer-paid sick pay work in Finland?

Where employment has lasted at least one month, the employer pays full pay for the illness through the end of the ninth day after the employee falls ill (9 days). After that, the state sickness allowance through Kela takes over. Where employment has lasted less than one month, the employer pays 50% of pay for the same window. Treat short-window sick pay as an event cost, not a fixed monthly charge.

Teamed Legal Operations

The number that surprises people about Finland is the pension. The employer TyEL contribution is bigger than every other statutory line combined, and it has no low cap, so it scales straight with salary. The second surprise is what is missing. No statutory minimum wage, no statutory severance. The pay floor and the holiday bonus live in the sector collective agreement, which is the document you actually have to read before you sign the offer.

A note from Tom Price-Daniel

Finland's pension contribution does the heavy lifting. The employer TyEL share is 17.10% of wages, larger than all the other employer lines combined.  
Add health, unemployment and accident cover and a Finland hire sits near 120% of gross before the collective agreement adds its floor.  
Know the pension rate. Read the collective agreement. Plan the notice cost before you sign the offer.

Tom Price-Daniel · Co-founder, Teamed

## Related Finland guides

- [Hiring in Finland, overview](/country-hiring-guides/finland)parent
- [Finland tax and payroll](/country-hiring-guides/finland/tax-and-payroll)sibling
- [Finland termination and severance](/country-hiring-guides/finland/termination-and-severance)sibling
- [Employer of Record overview](/lp/employer-of-record)core
- [Pricing, Zero FX Fixed](/pricing)core
- [Employer Cost Calculator](https://www.teamed.global/tools/employer-cost)tool
- [Talk to an expert](https://www.teamed.global/contact)CTA

A note on this page.

This is a guide, not legal, tax or accounting advice. Rules change and vary by jurisdiction, and Finnish pay floors are set by sector collective agreements that this guide does not reproduce. Verify current requirements with the Finnish Tax Administration (Vero), the Finnish Centre for Pensions (ETK) and the applicable collective agreement before relying on any specific figure. Worked examples in this guide are illustrative only and computed from verified 2026 statutory rates. They are not statutory figures. Finland has no statutory minimum wage and no general statutory severance pay; both are governed by collective agreements or arise only on unlawful termination.